One City's Quest to Erase the Gender Pay Gap

Boston is trying to ensure its female workers earn as much as men by asking local companies to rethink perks such as workplace flexibility and child care.

Women make an average of 77 cents for every dollar a man makes on the job. And, while some Washington lawmakers want to address that gap via legislation, the city of Boston is trying a different method: a voluntary city compact, with specific practices that participating companies can implement.

The initiative, called the "100% Talent: The Boston Women's Compact," launched in late 2013, the brainchild of now-former Boston Mayor Thomas Menino. With 50 businesses on board, the program has a way to go before measurable progress can be seen. But it has attracted some of the biggest employers in the city, such as the Boston Medical Center and Blue Cross Blue Shield of Massachusetts.

Businesses that sign the pledge agree to open their books and self-assess their wage data to see how, statistically, they do on pay parity, that pesky gap between what men and women earn nationally. Then, the companies choose three strategies to put in place. A report from the city offers 33 suggested "interventions," including following gender-blind application processes, standardizing compensation, and offering or subsidizing child care. Every two years, businesses will anonymously share their wage data with a third party, who will compile it for the city to measure overall progress.

Boston's gender gap is smaller than the national average, according to a report from the city's Women's Workforce Council, with women earning 83 cents for every dollar men make. Even after eliminating factors such as educational, occupational, and work experience differences, women still earn less than men, according to the council.

"The remainder you can't sort of wash away statistically. The remainder has to do with subtle things in the workforce, unconscious bias, things that businesses in the end get as frustrated about as women do, because they don't understand how to deal with them," says Simmons Business School Dean Cathy Minehan, who is leading Boston's initiative. "That remaining aspect of the gender gap is what this effort is all about."

Small and large companies have chosen to sign on, including Partners HealthCare, the largest private employer in Massachusetts. CEO Gary Gottlieb says women make up more than three-fourths of the company's workforce. The compact doesn't just mirror the company's values, he says, but "it's in our own business interest."

"The better that Boston can close that pay gap, the more that Boston becomes a very attractive place for graduates of the higher-education community, four-year colleges and professional schools," Gottlieb says. "That's a labor pool that's accessible to us."

Gottlieb says his company already has a number of the recommended practices in place, such as child care and positions that offer location and schedule flexibility, so it hasn't had to alter much. Women actually fare quite well at Partners already; the average female employee makes 13.5 percent more than the average man, Gottlieb says, largely due to a higher concentration of women in high-paying jobs. At lower-levels, such as food service, men earn an average of 2.5 percent more than female counterparts; Gottlieb says men at those ranges tend to hold the more senior positions.

Tackling unconscious bias and making wages more transparent will only go so far, however, argues Harvard economist Claudia Goldin, who has written extensively on gender and the labor market. In a recent study, she found differences in salaries between men and women could be dramatically reduced if businesses prized output over working long and specific hours, the so-called face-time at the office. The gap between male and female pay is larger in fields with rigid workdays and demanding client-employee relationships, such as law and finance, than those with more flexibility, such as tech.

But it's not businesses' responsibility to combat this problem; some of the gap is has to do with market demands. "There are certain cases in which the costs of handing off clients and partners is very expensive, but these costs change over time," Goldin says. Pharmacy work is one example of a field in which workers now can easily substitute for one another, thanks to advances in technology and changes in consumer expectations.

Minehan points to some of the practices suggested by the city's compact that encourage greater work flexibility. But only a few months in, the Boston's task force is just beginning to figure out how to measure success. The groupy plans to hold yearly conferences where organizations can share their best practices.

"We really were focused on not making this a new law, new regulation, new reporting requirement, but rather something that businesses felt they wanted to do," Minehan says. "There's so much emphasis on what government can do and I'm sure there's lots of things that government ought to be doing, but I think a lot of these issues need to be solved by people on the ground, the workers on the ground and the businesses, rather than a whole new [piece of] legislation."